Annuities
Fixed, indexed, and variable annuities explained
Annuities can provide guaranteed retirement income — but they're complex. Get clear, unbiased answers about how annuities work.
Common Questions About Annuities
Recent Annuities Questions
View allWhat is an annuity and how does it work - ELI5 for someone who knows nothing
My financial advisor mentioned I should consider an annuity as part of my retirement plan. I nodded like I understood but I have no idea what an annuity actuall…
Annuity surrender charge - stuck paying $12k to get my money out?
Put $100k in annuity 2 years ago. Need the money now for emergency. Surrender charge is 12% ($12,000 penalty). This feels like a scam. Any way to avoid paying t…
Annuity vs CD - which is safer for $200k?
Retiring with $200k to park safely. Bank CD pays 4.5%, annuity agent claims 5.5% with no risk. Annuity says principal guaranteed. Is annuity as safe as FDIC-ins…
Immediate annuity at 60 vs waiting until 70 - how much difference in payout?
Have $500k to put into immediate annuity. If I start payments at 60, I get $2,200/month. If I wait until 70, $3,800/month. Worth waiting 10 years? What if I die…
Fixed indexed annuity - why are caps so low if market does well?
FIA linked to S&P 500 with 6% cap. If market goes up 15%, I only get 6%? If market drops 20%, I get 0%. Seems like I can't really win. Why not just invest in in…
Fixed indexed annuity - how does the floor and cap actually work?
Insurance company is offering a FIA with 0% floor (can't lose money) and 10% cap on S&P 500 gains with participation rate of 100%. Sounds perfect. What am I mis…
What happens to my annuity if insurance company goes bankrupt?
Have $300k in annuity with insurance company I've never heard of. What if they go out of business? Is my money protected? How much does state guaranty associati…
Income annuity vs dividend stocks for retirement income?
Retiring with $1M. Option 1: Put $300k in income annuity for $18k/year guaranteed. Option 2: Invest in dividend stocks for 4-5% yield. Which is smarter for reli…
Annuity payout options - life only vs joint life vs period certain?
Retiring with $500k annuity. Payout options: $2,800/month life only, $2,400 joint life with spouse, or $2,600 with 20-year certain. How do I choose? What if I d…
Can I cancel annuity during free-look period without penalty?
Signed annuity contract 10 days ago, now having buyer's remorse. Contract says '30-day free look period'. Can I really cancel and get 100% refund? Has anyone do…
Inherited annuity from parent - do I pay income tax on full amount?
Mom left me annuity worth $180k (she put in $100k). Do I pay income tax on the $80k gain? Or full $180k? Can I stretch payments over time or lump sum only?
Equity indexed annuity caps and participation rates - help me understand
Looking at EIA tied to S&P 500. Cap rate is 5.5%, participation rate 85%, spread 2%. If S&P goes up 10%, what do I actually earn? This math is confusing me.
1035 exchange from old annuity to new - will I lose my money?
Have 15-year-old annuity with 3% return. New agent says I can 1035 exchange to new annuity with better rate. Is this safe? Will I lose accumulated gains or pay …
Living benefit rider on annuity - worth the extra 1.5% annual fee?
Variable annuity with living benefit rider costs extra 1.5%/year. Guarantees 5% withdrawal for life even if account goes to zero. With fees, is this actually va…
SPIA vs QLAC vs deferred income annuity - which should retirees consider?
I'm 68 with $800k in IRAs. Advisor wants to put $200k into some kind of income annuity. Confused by the options: single premium immediate annuity, QLAC (deferre…
Annuity death benefit options - what happens to my annuity when I die?
I have a deferred annuity with $280k in it. I'm 70 and haven't started taking income yet. What happens to the money if I die before annuitizing? My agent mentio…
What is the difference between an annuity surrender period and surrender charge?
Looking at a 7-year fixed annuity. The brochure mentions an 8-year surrender period with surrender charges starting at 8% and declining. Does this mean my money…
Immediate annuity with period certain - what happens if I die early?
Looking at immediate annuity with 20-year period certain. Pays $2,000/month. If I die after 5 years, do my heirs get remaining 15 years of payments? Or does ins…
Variable annuity with guaranteed income rider - too many fees or worth it?
VA offers guaranteed 5% withdrawal for life even if account goes to zero. Total fees are 3.8% annually. Market returns average 7% long-term. Will fees eat all m…
Deferred annuity with bonus - is 10% premium bonus too good to be true?
Agent offering deferred annuity with 10% premium bonus. Put in $100k, get $110k credited immediately. Surrender period is 10 years. What's the real catch here? …
Annuities Guides
All guidesFrequently Asked Questions
Are annuities a good investment?
It depends on your goals. Annuities excel at providing guaranteed lifetime income — they're insurance products, not growth investments.
Fixed vs indexed annuities: what's the difference?
Fixed annuities offer a guaranteed interest rate. Indexed annuities link returns to a market index with a floor so you won't lose money — but gains are capped.
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